Upgrading the Wealth Management Experience for Women
Peter Damisch, Monish Kumar, Anna Zakrzewski, and Natalia Zhiglinskaya July 2010 The Boston Consulting Group July 2010 A s wealth management clients, women are both signifcant and undervalued. They control about 27 percent of the worlds wealth (meaning that they decide where the assets are invested), yet more than half of the women we surveyed feel that wealth managers could do a better job of meeting the needs of female clientsand nearly a quarter think that wealth managers could signifcantly improve how they serve women. The survey, conducted in early 2010, was prompted by our annual global-wealth research, which showed a disparity between the signifcant number of women clients and the level of service they typically receive. The survey had about 500 respondents, each with at least $250,000 in bankable assets. It was complement- ed by more than 70 interviews with private-banking specialists and wealthy women around the world. Many wealth managers either overlook women as a discrete and important group or else use superfcial strategies to reach them. In fact, some of the most common approaches are worse than inefectivethey can alienate the very clients theyre meant to attract, particularly if they revolve around women-labeled products, pitches, or promotions that come across as patronizing or contrived. Wealth managers need a more nuanced approach. Women told us, in no uncertain terms, that they want a level playing feldthey want the same attention, advice, and terms and deals that men getwith advisors providing clear and objective recommendations based on their goals and risk profles. At the same time, however, more than 70 percent of the respondents said that wealth managers should tailor their services for women. This may seem contradictory, but the desire for a tailored approach is really a sign that women have distinct needs and expectations as clients, and that private banks have more work to do when it comes to the most important axiom in wealth management: know your client. Put simply, women want their advisors to understand who they are and what they want. Leveling the playing feld presents a signifcant opportunity for wealth managers, many of which are fghting harder than ever to win back or retain clients. By recognizing both the importance of women and the reasons why so many are disappointed with the industry, wealth managers can attract new clients and strengthen loyalty. And they can do so by fne-tuning, rather than reinventing, their approach to serving women clients. An Increasingly Wealthy and Independent Group Women controlled an estimated 27 percent, or about $20 trillion, of the worlds wealth in 2009. 1 (See Exhibit 1.) The percentages were highest in North America (33 percent), Australia and New Zealand (31 percent), and Asia (29 percent, ex Japan), and much lower in Latin America (18 percent), Japan (14 per- cent), and Africa (11 percent). In Europe, the percentage was highest in Western Europe (26 percent) and somewhat lower in Russia (21 percent) and Eastern Europe (19 percent, ex Russia). North America and Western Europe accounted for more than two-thirds, or $14.3 trillion, of the wealth controlled by women. These are the two largest wealth markets in the world, accounting for about two- thirds of global wealth as wellbut they also had relatively high percentages of women-controlled wealth. Historically, women in these regions have had good access to professional and educational opportunities. Leveling the Playing Field Upgrading the Wealth Management Experience for Women 1. All figures in this paper that refer to women-controlled wealth are based on estimates of wealth owned by clients with at least $250,000 in assets under management (AuM). The Boston Consulting Group July 2010 Leveling the Playing Field 2 EARLy dRAfT--INTERNAL BCG uSE oNLy While the percentage of wealth controlled by women has changed only gradually over time, the amount of wealth controlled by women has been on a rollercoaster ride since the start of the fnancial crisis, mirror- ing the overall movement in global AuM. Afer falling sharply in 2008, the amount of women-controlled wealth increased by 16 percent in 2009. (See Exhibit 2.) It grew by nearly 30 percent in Asia (ex Japan) and by 24 percent in Australia and New Zealand. In all other regions, it increased by anywhere from 13 to 18 percent, except in Japan, where it grew by only 2 percent. The amount of wealth controlled by women is expected to grow at an average annual rate of 8 percent from year-end 2009 through 2014, slightly above the 7 percent rate from year-end 2004 through 2009. Emerging markets are expected to take a characteristic lead in the growth of women-controlled wealth and wealth in generalover the next several years. Several long-term trends have fueled the growth of women-controlled wealth. first and foremost, women have become more active in the workforce. from 1980 to 2008, the number of women in the global workforce doubled to 1.2 billion. Whats more, the income gap between men and women has declined, so women are both working more and earning more. These changes have led to an increase in the proportion of women whose wealth is entirely self-earned. In our survey, 42 percent of the respondents derived all of their wealth from their own salaries and bonuses. Second, as a result of working more and accumulating wealth, women have gained both the confdence and the experience to become more involved in family fnances. Women not only earn more themselves, said Professor Thomas druyen, director of the Institute for the Science of Ethical Wealth at Sigmund freud university, but over the last decade or two, they have come to play an increasingly important role in managing a familys money. Third, more women are inheriting wealth, owing to their longevity. As a result, women are more likely to assume control over lump sums of wealth. In some countries, particularly in the Middle East and Asia, women continue to inherit less wealth than men, but the gap is narrowing as these societies come to accept the legitimacy of women as primary inheritors. The three trends have important implications for wealth managers: Womens wealth will continue to grow. We expect the increase to be driven mainly by salaries and bo- nuses, which will grow in line with womens educational and professional development, as well as by the continued narrowing of both the income and inheritance gaps.
9.0 0.5 2.8 5.3 0.5 0.1 0.04 0.4 1.5 0.04 20.2 AuM controlled by women, 2009 (%) 40 30 20 10 0 33 31 29 26 22 21 19 18 14 11 27 North America 1 Australia and New Zealand Asia (ex Japan) Western Europe Middle East Russia Eastern Europe (ex Russia) Latin America 2
Japan Africa Global AuM controlled by women ($trillions) Exhibit 1. Women Control 27 Percent of Global Wealth Source: BCG Global Wealth Market-Sizing Database, 2010. Note: AuM controlled by women represents wealth that is invested on the basis of decisions made by women; data reflect wealth owned by women with more than $250,000 in AuM. AuM in 2009 was calculated using 2008 U.S. dollar exchange rates. 1 The United States and Canada. 2 South America, Central America, and Mexico. The Boston Consulting Group July 2010 Leveling the Playing Field 3 EARLy dRAfT--INTERNAL BCG uSE oNLy Women will account for a growing proportion of high-net-worth (HNW) clients, which are generally defned as having between $1 million and $20 million in wealth. Several private-banking experts noted that wealth managers need to be prepared for an upward migration of women into the HNW segment, especially in the emerging markets. Women will become more independent when making fnancial decisions. In our survey, 30 percent of women said they make their investment decisions alone rather than relying on a spouse or other family members. We expect this percentage to rise as women accumulate both fnancial experience and wealth. The trend will be more pronounced in markets that have high levels of entrepreneurial activity. We are a young market, remarked an Eastern European private banker, and more than half of our female clients are entrepreneurs. Their profciency level in fnancial matters is similar to that of men. An Uneven Playing Field Many drivers of dissatisfaction with wealth managers are universal rather than specifc to women clients. for example, 18 percent of our respondents were dissatisfed with communication and reporting and 14 percent were dissatisfed with the quality of advice. (See Exhibit 3.) other perennial issues popped up as well, such as the poor accessibility of advisors, the lack of tailored solutions (one size does not ft all), and the overabundance of bureaucracy and paperwork. Some 27 percent of the women surveyed were not satisfed with their private banks, largely because of the factors described above. The level of discontent was highest among women with $1 million to $5 million in AuM. Clients in this segment, both men and women, sometimes feel caught in the middle: their invest- ment needs are too sophisticated to be fulflled by a retail bank, yet they feel too insignifcant, given their level of wealth, to really matter to a private bank. But the survey also revealed issues that were unique to women. The majority of survey respondents AuM controlled by women, 2009 ($trillions) 5 17 2014 11.7 2009 9.0 2008 7.7 9 13 2014 7.9 2009 5.3 2008 4.7 13 17 2014 0.2 2009 0.1 2008 0.1 14 29 2014 5.3 2009 2.8 2008 2.2 2 2 2014 1.6 2009 1.5 2008 1.4 8 16 2014 29.0 2009 20.2 2008 17.3 5 24 2014 0.6 2009 0.5 2008 0.4 13 18 2014 0.6 2009 0.4 2008 0.3 19 15 2014 0.1 2009 0.0 2008 0.0 8 15 2014 0.8 2009 0.5 2008 0.5 8 15 2014 0.1 2009 0.0 2008 0.0 Compound annual growth (%) North America 1 Middle East Asia (ex Japan) Africa Australia and New Zealand Latin America 2 Eastern Europe (ex Russia) Russia Western Europe
Japan Global Exhibit 2. Women-Controlled Wealth Made a Strong Comeback in 2009 Source: BCG Global Wealth Market-Sizing Database, 2010. Notes: AuM controlled by women represents wealth that is invested on the basis of decisions made by women; data reflect wealth owned by women with more than $250,000 in AuM. AuM in 2009 and 2014 were calculated using 2008 U.S. dollar exchange rates. Projections for 2014 assume that the share of wealth controlled by women remains stable over the next five years. 1 United States and Canada. 2 South America, Central America, and Mexico. The Boston Consulting Group July 2010 Leveling the Playing Field 4 EARLy dRAfT--INTERNAL BCG uSE oNLy 55 percentfelt that wealth managers could do a better job of meeting the needs of women. (See Exhibit 4.) Twenty-four percent thought that private banks could signifcantly improve how they serve women. The dissatisfaction stems almost entirely from the unshakable perception that the playing feld is not even that men get more attention, better advice, and sometimes even better terms and deals. This sense of subordination was repeated time and again in our interviews: Equal access to information, equal consideration and terms for loans, equal access to special deals going on at the bankthats what I am looking for. Married, North America Aside from not taking women seriously in general, [wealth managers] should be focusing on generating the best returns for the client, regardless of gender. I dont need a tea party. Single, North America What banks need is a revolution like the automotive industry had: to fnally understand that women not only sit in the cars but also choose, buy, and drive them. Married, Spain Banks are spending their marketing budget on men by sponsoring sports such as football or rugbyMale clients also get invited to corporate boxes at games, but as a woman I dont get that kind of treatment. Married, New Zealand The problems that cause women to feel like second-class clients are deep-seated. They stem from experi- ences in the advisory process as well as from the communication style of private banks and relationship managers (RMs). Level of satisfaction with wealth managers (% of respondents)
Key areas that need to be improved (% of respondents) 80 60 40 20 100 0 80 60 40 20 100 0 $250,000 $500,000 $500,000 $1 million $1 million $5 million $5 million $50 million Very dissatised Somewhat dissatised Somewhat satised Very satised Nothing Performance Product oering Services Bureaucracy/exibility Accessibility/convenience Pricing Being proactive Trust Managing women-specic issues Advice quality/guidance Tailored, goal-oriented approach Communication/reporting 14 43 43 0 13 53 20 14 32 47 19 2 24 55 19 2 18 56 20 6 20 15 10 5 0 18 15 14 11 8 8 2 4 5 5 5 2 1 Overall Client Segment Exhibit 3. Discontent Is Highest Among Clients with $1 Million to $5 Million in AuM Sources: BCG Women in Wealth Management Survey, 2010; BCG analysis. Note: These results are based on responses from 168 participants; not every survey question was answered by all respondents. The Boston Consulting Group July 2010 Leveling the Playing Field 5 EARLy dRAfT--INTERNAL BCG uSE oNLy The Advisory Process The advisory process is at the heart of the wealth management experience, and it turns almost entirely on an advisors ability to develop alternatives and recommendations that are based on a clear understanding of the client. Many women, however, said their advisors or RMs assume that they have a low risk tolerance and thus provide only a narrow range of investment solutions. Some said that they were given dumbed down versions of the standard oferings. others said that their advisors were too quick to focus on strat- egies or products that have less of an emphasis on performance, such as sustainable or green invest- ments, on the assumption that women are more attuned to social issues. feeling stereotyped rather than understood, several women in our survey had opted to manage their investments on their own. Some women also feel that wealth managers do not pay enough attention to circumstances that can radically change their priorities. A womans investment needs and risk profle can be afected by major life changes, such as marriage or divorce, the birth of a child, or the death of a spouse. The same can be said of men, of course, but the reality is that women are more likely to have their fnancial priorities rearranged by such events. Women, for example, are more likely to forgo earning an income afer the birth of a child. They are also more likely to assume new fnancial responsibilities, sometimes with little or no preparation, as a result of a divorce or the death of a spouse. All of a sudden I had a lot of money and had to manage it, one woman said. But I dont have time for it. I work and take care of my three children. More fundamentally, many women feel that the advisory process is geared toward short-term results, and that it discounts the signifcance of long-term objectives that refect the impact of the major milestones in a persons life. This is a function of incentive systems and company cultures, but it is also a shortcut and a symptom of a superfcial advisor-client relationship. It takes time to understand a clients long-term objectives. The RM did not remember anything that had been discussed in our previous meeting, and knew nothing about meor my situation, said one woman. Communication Style Women were critical of the demeanor of their RMs. Many told us that their advisors do not take them Still, the survey suggests that wealth managers need to make subtle rather than sweeping changes 80 60 40 20 100 0 Strongly disagree Somewhat disagree Somewhat agree Strongly agree 8 20 58 14 More than 70 percent of respondents believe that wealth managers should tailor their approach for women More than half of respondents believe that wealth managers could improve their service to women "I believe a bank should have a service approach tailored for women." 80 60 40 20 100 0 No need for improvement Need for improvement Need for signicant improvement 45 31 24 Could your private bank improve how it meets the needs of women clients? Product oering Service model Few respondents raised issues with the actual products Many more highlighted problems in the advisory process, along with the communication style of banks and relationship managers % % Exhibit 4. Women Want Wealth Managers to Recognize Their Needs Sources: BCG Women in Wealth Management Survey, 2010; BCG analysis. Note: The question on the need for improvement had 141 respondents, and the question on having a tailored approach had 144 respondents; not every survey question was answered by all respondents. The Boston Consulting Group July 2010 Leveling the Playing Field 6 EARLy dRAfT--INTERNAL BCG uSE oNLy seriously, which made for of-putting and sometimes humiliating interactions. one woman said that her bank addresses letters to her husband, even though she manages their investments. Several told us that their RMs automaticallyand conspicuouslyassume that the man has the fnal say about an invest- ment. My husbands income is lower than mine, and that is a situation that banks in Germany do not know how to deal with, remarked one woman. They always decide that there must be some mistake, which makes meand my husbandfeel uncomfortable. Why Do So Many Wealth Managers Miss the Mark? When it comes to advising women, many wealth managers are putting the accent in the wrong place. They tend to alter their advice based on stereotypes that they should ignorewhile overlooking material diferences between men and women as wealth management clients. Stereotypes, by defnition, are oversimplifcations and can lead to awkward exchanges and strained relationships. Still, our survey and interviews, coupled with past BCG research and project experience comparing the investing preferences of women and men, turned up several important traits shared by many female clients. 2 These traits, in turn, lead to expectations that set many (but by no means all) women apart from men. Women ofen focus on long-term investment goals and seek holistic advice. Women tend to set clear goalsusually in response to, or in anticipation of, the life changes mentioned earlierand they want their investment strategy, and its ongoing execution, to revolve around these objectives. Wealth is a means of life planning rather than a goal in itself, remarked one survey respondent. This perspective has two important implications for wealth managers: first, women are more intent on understanding the risk-return profles of investments as they relate to their overarching goals and fnancial security. By the same token, they are less likely to be distracted by short-term performance. This long-term view is refected in womens investment strategies. More than 70 percent of the women in our survey favor balanced or conservative investment strategies; among women older than 50, the percentage is close to 95 percent. Second, because of their goal-oriented mindsetand, in some cases, the pressure to manage both career and household responsibilitiesmost women want advice and product information that is not muddled by unnecessary details. I want statements that are clear, easy to read, and can be interpreted on no sleep or while parallel-processing family chores or work, one woman said. on four hours of sleep, while on a conference call from work, I want to be able to sort through personal fnancial things. youll almost never have my full attention, so make [the reporting] easy, clear, and honest. Empathy matters. Men tend to view their wealth-management relationships through a business-oriented lens. Their advisors can establish trust fairly quickly by facilitating efcient transactions and delivering short-term results. Most women, on the other hand, want their banking relationships grounded in empa- thy and customized advice. Every relationship is personal, said one woman, including a banking one. for most women, trust develops slowly and is based on an advisors ability to recognize and respond to her long-term objectives. A small minority of women believe that female RMs would be better at building such relationships, but the vast majority are indiferent to the gender of their advisor. (See the sidebar Are female RMs Better at Connecting with Women?) Women are eager to learn. Interviews with clients and private bankers indicate that many women are as sophisticated in fnancial matters as men. But compared with men, who ofen hide their lack of knowledge about fnancial matters, womenregardless of their level of fnancial knowledgeare generally open to learning about investments and wealth management through seminars or other events. 2. for more on BCGs research into the female economy, see Women Want More: How to Capture More Than your Share of the female Economy, BCG opportunities for Action, August 2009, and Women Want More (in financial Services), BCG opportuni- ties for Action, october 2009. The Boston Consulting Group July 2010 Leveling the Playing Field 7 EARLy dRAfT--INTERNAL BCG uSE oNLy These generalizations should not be taken as holy writ, of course, but they do shed some light on why women are dissatisfed with private banks. They also provide a useful backdrop for understanding why so many private banksdespite recognizing and targeting other discrete groups of clients, such as doctors or lawyersstill have a service gap between male and female clients. The gap varies among wealth managers. At one extreme are private banks that simply do not acknowl- edge women as an important segment. Many European banks, in particular, see wealthy women as too small a segment to justify a separate approach. other banks do not see women as a distinct client group. Women do not need a diferent approachthey want the same service and products as men, said a European banker. This is true, of course, but it is not the whole story. other banks believe that women, as a group, are both important and distinctbut they havent followed through by researching womens preferences or developing strategies to address their needs. In many emerging markets, where wealth is growing at above-average rates and the advisory business is still expanding at a nice pace, banks have less incentive to invest in a more sophisticated segmenting of clients. Instead, they rely on traditional metrics such as risk profles and levels of wealth. Some banks do have women-focused initiatives. In many cases, however, these eforts involve little more than repackaged products or targeted marketing campaigns. Such eforts can easily come across as sales ploys rather than meaningful attempts to deliver something that women value. They may even alienate more clients than they attract. I dont think anyone should have a women-focused approach, said one woman. They should be tailoring their approach for everyoneSome try by ofering pink stuf, which is a bit contrived. A small number of banks have developed genuinely personalized oferings that avoid coming across as simplifed or patronizing overtures and actually respond to the needs and expectations of women clients. one European bank, for example, redefned its approach to acquiring and serving women and now The proportion of female RMs, based on estimates developed through our research and interviews with private bankers, ranges from 10 percent in the Mid- dle East to 60 to 65 percent in Asia and Eastern Eu- rope. In Western Europe, 25 to 30 percent of RMs are female. Experts in private banking told us that female RMs are generally very good at forming strong relation- shipsregardless of the clients gendermainly be- cause they tend to be more empathetic and are more likely to establish a personal connection with the cli- ent. In some regions, such as Eastern Europe, female RMs are also considered more trustworthy and reli- able than male RMs. It should follow, then, that fe- male RMs would be better at developing client rela- tionships with women. In our survey, however, 85 percent of women said that they were indiferent to the gender of their RM. They cared much more about the advisors personal- ity and qualifcations. I want the best person for the job, said one respondent. Only 11 percent said that they preferred having a female RM; these respon- dents said that a female RM would better under- stand their needs and would be less intimidating and more down to earth. The remaining 4 percent of women were worried that female RMs might be time-pressured (having to juggle a family and a ca- reer) or more likely to take time of. Although most women are not concerned about hav- ing a female advisorand the common practice among banks is to match clients with RMs based on the compatibility of their personalitiesthere is still an argument for wealth managers to actively recruit women, in part to increase diversity in the workforce but also to capitalize on female RMs strengths when it comes to building relationships. Banks and broker- age frms can make it easier to attract and retain fe- male advisors through teaming or job-sharing mod- els, which ensure continuity for both the client and the bank when an advisor takes maternity leave, for example. Are Female RMs Better at Connecting with Women? The Boston Consulting Group July 2010 Leveling the Playing Field 8 EARLy dRAfT--INTERNAL BCG uSE oNLy generally requires wealth planners to become involved early in the relationship, which helps ensure that they understand the clients needs and are able to provide holistic advice. Upgrading the Client Experience for Women Private banks have good reason to target women, given both the dissatisfaction driven by gender-specifc issues and the substantial wealth controlled by this group. Most will fnd that the problems are less about what they provide for women, in terms of products, and more about how they deliver their service. They will also fnd a receptive audienceas noted earlier, more than 70 percent of the survey respondents believe that wealth managers should tailor their approach for women. To close the service gap between men and women, wealth managers should follow a set of practices that we call the four Rsrecognize, research, respond, and refne. Recognize The senior leadership team should signal to the organization that women as a client segment are both distinct and importantand potentially underserved. They should also make a clear commitment to improving their approach to serving women by moving away from superfcial women-labeled products and toward a refned ofering that resonates with women. Research Wealth managers need to understand how the needs of female clients difer from those of male clients. Reaching out directly to clients might be the best way to start. I expect [wealth managers] to fnd out what I need, said one woman, and not to assume it. Private banks with advanced market-research functions should be able to pinpoint issues that are specifc to women and then translate these fndings into actionable insights. (See the sidebar Hearing the Consumers Voice.) But they should remember that Generating and exploiting market researchknowl- edge that brings a company closer to the hearts and minds of its targeted consumerscan yield im- mense impact, particularly in instances where com- panies, at a systematic level, are blind to issues that are critical to large groups of customers, as is the case with women in wealth management. Most companies, however, struggle to unlock the val- ue of the market research function, also known as consumer insight. This was a key fnding of a Novem- ber 2009 BCG report, The Consumers VoiceCan Your Company Hear It? which benchmarked the consumer insight capabilities of 40 companies in a range of in- dustries. Frustrations were evident among both the recipients of market researchthe line managersand those who generate the output. When asked whether con- sumer insight teams consistently answer the ques- tion So what? about the data they provide, only 34 percent of line managers said that they do. On the other side of the coin, fewer than half of insight staf thought that the business leaders in their organiza- tion could pass a pop quiz on important facts about consumers. If companies are not hearing the consumers voice, it is probably because they follow a hemmed-in ap- proach to market research. The study identifed four stages of a companys consumer-insight capability. At one end of the spectrumstage oneconsumer insight is essentially an isolated order-taking func- tion, walled of from critical business decisions. At the opposite endstage fourit is a source of com- petitive advantage. Its fndings infuence cross-frm decisions such as acquisitions, prioritization of mar- kets, and resource allocation. In our study, almost 90 percent of companies were still at stages one or two. To capture the full potential of consumer insight, companies must improve the engagement model. This involves, among other things, getting senior managers involved and expanding the scope of the function. Companies also need to improve the per- formance of the function by upgrading capabilities and focusing the team on the right activities and de- liverables. Hearing the Consumers Voice The Boston Consulting Group July 2010 Leveling the Playing Field 9 EARLy dRAfT--INTERNAL BCG uSE oNLy the drivers of discontent can be complex and subtleand will almost certainly vary depending on the clients life stage, profession, familiarity with fnancial matters, and other factors. Respond An initiative targeting women is not going to lead to a radical overhaul of the service approach. In fact, some of the things that wealth managers should not do, in terms of responding to women, might be just as important as some of things they should do. Product Ofering. Wealth managers should not deceive themselves into thinking that they can close the gap by rebranding existing products. Many women, as noted earlier, fnd such eforts patronizing. The problems that women encounter in private banking stem not from a lack of suitable products but from a lack of holistic advice. As one private-banking specialist acknowledged, Banks are too product-oriented Advisory has to be based on a better understanding of the situations and needs of each client. Advice. Many women told us that their gender should have no bearing on the advice they receive. In truth, however, female clients ofen share some important characteristics. Private banks should focus on these common traits, but not to the exclusion of individual characteristics. As already noted, women tend to focus on long-term objectivesand to value the big-picture view more than the technical aspects of individual products. RMs should keep these characteristics in mind. The Role of the RM. The importance of the RM cannot be overstated. Improving the [advisory] talent pool is more important than creating a women-dedicated ofering, said one banker. If a bank manages to do that, then the underlying interests of a woman will be met as a matter of course by thoughtful and understanding staf. More specifcally, wealth managers should train their RMs to recognize how certain life events can alter womens risk profles. Such moments of truth provide an unparalleled opportunity for advisors to become trusted partners. At the same time, however, RMs must not be captive to stereotypes. Not all women are risk averse, and they care as much about performance as men do. Well-trained RMs will recognize that some client traits are common but none are universal. Communication. While female clients bristle at stereotypes, advisors should recognize that certain kinds of communication and interaction could signifcantly improve their ability to attract and retain female clients. This dichotomyavoid stereotypes but address commonalitiesleads to several dos and donts for RMs: Cater to the client, not the gender. The communication style should be determined on a case-by-case basis and should acknowledge the wide array of client profles. Show empathy and build trust. female clients are likely to value these qualities more than men do. Advisors need to listen to the client and always keep her overarching objectives front and center. Private banking is, afer all, a people business. Recognize and address regional and country diferences. In the Middle East, for example, high divorce rates in some countriesand the vagaries of the disposition of wealth in a divorce settlement or an inheri- tance situationcan make womens fnancial well-being somewhat precarious and lead them to give more thought to their fnancial independence and their wealth-management needs. (See the sidebar developing an ofering for Women in the Middle East.) Refne Wealth managers should continuously monitor client satisfaction to determine whether the ofering needs to be adjusted. This will not only generate ideas for refning the approach but will also signalto both clients and the organizationthe importance of women as a client segment. A s important as it is for wealth managers to improve how they serve womenparticularly since discontent was highest among clients with $1 million to $5 million in AuM (the sweet spot for many private banks)it is equally important that they understand the cost of artless overtures. overreacting to The Boston Consulting Group July 2010 Leveling the Playing Field 10 EARLy dRAfT--INTERNAL BCG uSE oNLy the problem with graceless solutions will do more harm than good. There is a fne line between being aware of what women want and overstating the relevance of generalizations. Likewise, wealth managers should understand that the diferences among individuals are going to be far more important than the diferences between the genders. An initiative aimed explicitly at women is only going to scratch the surface of a clients needs. Many other factorssuch as the clients stage in life and in work, her country of origin or residence, and her level of wealthcome into play. Wealth managers can put their RMs in a better position to initiate or enrich relationships simply by calling attention to areas where women generally feel undervalued or overlooked. Ambitious wealth-management institutions should develop robust training programs and incentive systems that drive home the impor- tance of actions that can make a meaningful diference to women. The outward changes may be subtle, but they can still resonate with womenand thus lead to higher satisfaction and greater loyalty. Women control about 22 percent of the wealth in the Middle East, although there are marked diferences among countries. Several factors make women both distinct as a group and increasingly important to wealth managers. For example, high divorce rates force women to think more about fnancial security and independence for themselves and their chil- dren. In addition, a high proportion of female clients are young entrepreneurs, many of whom are on the verge of joining the high-net-worth segment. Finally, although women tend to inherit less wealth than men, the gap is narrowing. Women in the Middle East have many of the same grievances about wealth managers as women in oth- er regions. Many cannot fnd advisors who take them seriously, let alone ones they can trust. Clients who lack a solid understanding of investments (but want to learn) said that RMs do not adequately explain the products and their risks. More sophisticated cli- ents said that their advisors automatically assume that they have a low risk tolerance and provide only a limited range of investment solutions. The lack of adequate fnancial advice is at odds with the complexities of womens fnancial-planning needs. In some societies, for example, it is possible for multiple wives to inherit an individuals wealth. In addition, a womans eligibility for fnancial sup- port following a divorce is ofen determined on the basis of her current wealth, whether acquired before or during the marriage. As a result, a womans fnan- cial well-being can be somewhat more precarious in the Middle East, and wealth managers should there- fore focus on a very clear value proposition: safe- guarding a womans fnancial independence and her rights vis--vis third parties (who may stake a claim to her wealth); preserving absolute confdentiality; and helping the client develop her fnancial knowl- edge. Despite a strong need for a targeted approach for women in the Middle East, the opportunity to reach this group has gone largely unnoticed, although the situation is starting to change. The fnancial crisis prompted many clients to move their assets to local banks, which are now working to upgrade their pri- vate-banking oferings in order to retain these newly acquired clients. A small number of banksbut only local competitors to datehave launched oferings that target women. Developing an Offering for Women in the Middle East The Boston Consulting Group July 2010 Leveling the Playing Field 11 EARLy dRAfT--INTERNAL BCG uSE oNLy About the Authors The authors are core members of the financial Institutions practice of The Boston Consulting Group. They are also part of the team that produces BCGs annual report on global wealth. Peter Damisch is a partner and managing director in the Zurich ofce of The Boston Consulting Group. you may contact him by e-mail at damisch.peter@bcg.com. Monish Kumar is a senior partner and managing director in the frms New york ofce and the global leader of the asset and wealth management segment of the financial Institutions practice. you may contact him by e-mail at kumar.monish@bcg.com. Anna Zakrzewski is a principal in BCGs Zurich ofce. you may contact her by e-mail at zakrzewski.anna@bcg.com. Natalia Zhiglinskaya is an associate in the frms Zurich ofce. you may contact her by e-mail at zhiglinskaya.natalia@bcg.com. first and foremost, the authors would like to thank the women who participated in our survey and shared their experiences in interviews. We could not have written this paper without their participation. We also spoke with a range of wealth management experts and private-banking executives around the world. They, too, made an invaluable contribution to our paper. We also drew on the knowledge and experience of our BCG colleagues. In Asia-Pacifc, we called on Nelson Choi, Vinoy Kumar, Tjun Tang, and Miki Tsusaka. In Europe, we relied on daniel Kessler, Kirsten Lange, Andy Maguire, and Pia Tischhauser. Joel Muiz, federico Muxi, and Andr Xavier provided insights into Latin Americas wealth-management sector. In the Middle East and Africa, we called on douglas Beal, Sven-olaf Vathje, and Lynn Zovighian. from North America, we received guidance from Paul orlander and Carrie Perzanowski. for insights into the broader theme of the female economy, we relied on Michael Silverstein. In addition, we spoke with Professor Thomas druyen from Sigmund freud university about the role of women in wealth management. The authors would also like to thank the members of the core project team, Judith Albrecht and Patrick Lehner, as well as dan Coyne for his help in writing the report, and Kim friedman and Janice Willett for contributions to its editing, design, and production. The Boston Consulting Group (BCG) is a global management consulting frm and the worlds leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest- value opportunities, address their most critical challenges, and transform their businesses. our custom- ized approach combines deep insight into the dynamics of companies and markets with close collabora- tion at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. founded in 1963, BCG is a private company with 69 ofces in 40 countries. for more information, please visit www.bcg.com. The Boston Consulting Group, Inc. 2010. All rights reserved. 7/10